US stocks gained ground today as Americans headed for the midterm elections, with S&P strengthening for the third straight day. Historical evidence suggests that stock markets performed well following the midterm results, and this drove the sentiment in the US markets today. The dollar weakened below 110, and the 10yr US Treasury yield remained broadly unchanged. The 2yr yield settled at 4.67%. Meanwhile, US small business optimism dropped for the first time since June, retreating to 91.3 as the sales outlook worsened, with many noting that inflation has accelerated.
Base metals have begun today on the back foot, but a weaker dollar drove a healthy gain across the entire base metals complex. This has offset the weakness coming from China, where prevailing lockdown measures and a jump in covid cases soured the optimism on potential reopening. Aluminium jumped higher above $2,360//t, testing October highs of $2,372/t. Likewise, copper breached resistance of $8,050/t, settling higher at $8,115.50/t. Both copper ore and unwrought copper rose by 8.4% y/y and 8.8% to 20.76m t and 4.817m t, respectively, but we expect overseas demand for final material to deteriorate as global economic prospects dwindle. Nickel jumped higher to $24,012/t. Lead and zinc closed higher at $2,054/t ad $2,931/t, respectively.
Oil futures, on the other hand, fell, driven by pessimism coming from China; WTI and Brent softened into $90/bl and $97/bl. Precious metals rallied on the back of a weaker dollar, with gold testing the highs of $1,715/oz, a level not seen since early October; silver jumped to $21.60/oz.
All price data is from 08.11.2022 as of 17:30
